RELATIONSHIP BETWEEN CORPORATE SUSTAINABILITY AND RETURN ON INVESTED CAPITAL OF PAKISTANI FIRMS

Authors

  • Syeda Fizza Abbas Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan
  • Tooba Lutfullah Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan
  • Fareeha Waseem Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan

DOI:

https://doi.org/10.52567/pjsr.v4i04.874

Abstract

The purpose of this research is to examine the impact of corporate sustainability on the return on invested capital performance for the non-financial sector in Pakistan. The data has been taken from the KSE-100 Index of 74 Non-Financial Firms for the period of 2015-2020 by taking the data from the sustainability reports, annual reports and website disclosures of the respective companies. The index for sustainability is based on the five sub-indices namely, economic, environmental, social, governance and health & safety indicators with the composite overall sustainability index. The panel regression model technique has been applied using the fixed effect to analyze the individual indicators as well as composite effect of sustainability index for the evaluation of company’s performance. The results for the study indicates positive effect of economic, environmental, social, governance sustainability indicators and a composite sustainability index on the return on invested capital. This research depicts clear relevance of the sustainable practices on the corporate strategy and its financials. The findings of this study will be useful for respective companies’ management to better understand the importance of sustainability practices in corporate strategy for the better performance of the company.

Keywords: Corporate sustainability, return on invested capital, non-financial firms, fixed effect, health & safety sustainability, environmental sustainability

Author Biographies

Syeda Fizza Abbas, Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan

Assistant Professor 

Tooba Lutfullah, Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan

Research Scholar

Fareeha Waseem, Department of Accounting and Finance, Kinnaird College for Women, Lahore Pakistan

Lecturer

Additional Files

Published

2022-12-31